Paramount is on the brink of making a significant change in leadership, with plans to remove chief executive Bob Bakish, amid ongoing merger discussions with Skydance Media and the looming possibility of a counterbid from Sony and Apollo.
Bakish, who has been with Paramount and its predecessor, Viacom, for over two decades, has found himself at odds with Shari Redstone, particularly regarding the Skydance offer.
Common shareholders have criticized the deal’s structure, alleging that it favors Redstone. Bakish’s perceived lack of cooperation during the sales process has exacerbated tensions.
A decision on Bakish’s future was expected at a board meeting on Sunday, marking the latest development in a tumultuous period for Paramount.
The company, known for iconic films and TV shows like The Godfather and Star Trek, faces financial challenges, including losses in its streaming service and the declining viewership of its television channels.
David Ellison, CEO of Skydance, backed by his father Larry Ellison and private equity groups RedBird and KKR, has proposed a complex transaction involving the acquisition of National Amusements, Paramount’s majority voting shareholder, followed by Paramount’s acquisition of Skydance.
However, some Paramount shareholders have opposed the proposed deal structure, threatening legal action if it proceeds.
Meanwhile, Apollo’s $26 billion all-cash bid for Paramount was recently rejected. Amid these developments, four members of Paramount’s board have withdrawn their names for re-election in June.
Despite the exclusive negotiations between Paramount and Skydance, Sony and Apollo are poised to submit a joint offer close to the expiration date of the talks, possibly by May 3. Concerns over regulatory approval loom over a potential acquisition by Sony and Apollo.
As the situation unfolds, Ellison’s relationship with Paramount remains significant, with Skydance having collaborated on several successful projects with the studio.
.Skydance’s plans involve recapitalizing Paramount under Ellison’s leadership and implementing new management, including former NBCUniversal executive Jeff Shell.
Paramount is scheduled to report earnings after the market closes on Monday. While speculation about a potential acquisition had boosted Paramount’s shares last year, they have declined by 18% this year.
